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It would be nice to see how Morningstar would construct a portfolio with these funds...What percentages would they hold these funds for different types of investors (aggressive vs. conservative).
More than a few left me thinking "what???". They seem incredibly slow and/or hesitant to make changes. And the diversification is rather restricted, given the many good alternative strategy options now available. But what the heck...
Ah, the grand plan would be a "federal law" for 401k, 403b, 457 or similar retirement programs to be mandated to offer a Schwab type of plan (a personal account) or a Fido brokerage acct. type and/or what any other vendor may provide that is similar; so that the retirement plan investor has a very large base of the fund/eft world open to them. All plans would have a "stable value" (psuedo bond fund) choice, too.
M*'s list is too small and to me the obvious choice situation is for a "plan" to be wide open......period.
The burden of decisions and related for such a setup would remove a cost and time eating function of HR depts. for companies.
We know that many companies providing retirement plans do not, have not and will not have much vision as to which vendor and/or choices to offer to an employee for choices of investments.
I have viewed numerous plans over the years and wished that my 401k could have such wonderful choices. For employees, it is a by chance situation, dependent upon who they happen to be employed.
I asked too many times over the years of my plan admins; where are the inflation protection choices and such. Heck, this is not their area of expertise running an HR function. I am most positvie that none of them had a clue about choices in a plan; and yet someone made a plan choice that I must live with; from those who are clueless.
I found too many times a superfluous/redundant list of similar choices of too many overlapping offerings. I don't need 5 each of small/mid/large caps. Take a few of those away and give me access to TIPS, commodities and a metals fund. Many plans that I have viewed lack what we here know to be the options for a well diversified investment basket; if one is inclined to set such a goal.
Reply to @catch22: I totally agree. Corporations should get out of the business of picking funds and the 401k, 403 type of account should be liberated.
I am actually pissed of various different type of account for different purposes. We do have IRA, Roth IRA, 401k, 529 Collage Savings Account, HSA accounts. There should be one type of tax advantaged account that cater for multiple purposes. The money is fragmented unnecessarily and also you cannot always determine in advance (actually usually) what amount you would need for what purpose (Retirement, College, Health Savings)
Imagine the electronic link for an employee, not unlike our choices here, after clicking the ticker symbol; where we are able to venture to various locations to obtain fund data.
Part of their investment decision making for their 401,403 or whatever would come from a similar vendor list. All costs, options and related would be clearly identified.
This method is even more critical today; as the majority of companies no longer place a defined pension in place and the employee (hopefully with a company match) is on their own for a pension plan (401, etc).
Temporary jobs would be created, as the insurance industry would hire about 1,000 more lobby folks to fight against such a plan that would take away their bloated fees.
And one can only imagine the new, lower fee structures that would be put in place from the competition among the fund vendors; not unlike the early days of Fido and Vanguard putting a death nail into the traditional retail fund fees of E.F. Hutton, Merrill Lynch and all the others who had to change their money tune or be left in the dust from the stampede.
Another fee feature should be added to the 529 plans, not unlike the 90 or 180 day fee periods we find with our fund families today. To limit asset moves to only once per year in a 529 is so much crap. This is not a method to help protect the monies for one's child college monies. I have written to our DC folks about making such changes; but they have been stuck with all of the machinations/legislation since the market melt, that this request is surely long forgotten. An example could be 3 reallocations of 529 monies in a calendar year; with additional moves costing 1%, or whatever. This fee charge should more than cover transaction costs incurred by the fund family.
Well, there is surely more; but I need to get back to work.
Comments
It would be nice to see how Morningstar would construct a portfolio with these funds...What percentages would they hold these funds for different types of investors (aggressive vs. conservative).
bee
M*'s list is too small and to me the obvious choice situation is for a "plan" to be wide open......period.
The burden of decisions and related for such a setup would remove a cost and time eating function of HR depts. for companies.
We know that many companies providing retirement plans do not, have not and will not have much vision as to which vendor and/or choices to offer to an employee for choices of investments.
I have viewed numerous plans over the years and wished that my 401k could have such wonderful choices. For employees, it is a by chance situation, dependent upon who they happen to be employed.
I asked too many times over the years of my plan admins; where are the inflation protection choices and such. Heck, this is not their area of expertise running an HR function. I am most positvie that none of them had a clue about choices in a plan; and yet someone made a plan choice that I must live with; from those who are clueless.
I found too many times a superfluous/redundant list of similar choices of too many overlapping offerings. I don't need 5 each of small/mid/large caps. Take a few of those away and give me access to TIPS, commodities and a metals fund.
Many plans that I have viewed lack what we here know to be the options for a well diversified investment basket; if one is inclined to set such a goal.
Regards,
Catch
I am actually pissed of various different type of account for different purposes. We do have IRA, Roth IRA, 401k, 529 Collage Savings Account, HSA accounts. There should be one type of tax advantaged account that cater for multiple purposes. The money is fragmented unnecessarily and also you cannot always determine in advance (actually usually) what amount you would need for what purpose (Retirement, College, Health Savings)
Imagine the electronic link for an employee, not unlike our choices here, after clicking the ticker symbol; where we are able to venture to various locations to obtain fund data.
Part of their investment decision making for their 401,403 or whatever would come from a similar vendor list. All costs, options and related would be clearly identified.
This method is even more critical today; as the majority of companies no longer place a defined pension in place and the employee (hopefully with a company match) is on their own for a pension plan (401, etc).
Temporary jobs would be created, as the insurance industry would hire about 1,000 more lobby folks to fight against such a plan that would take away their bloated fees.
And one can only imagine the new, lower fee structures that would be put in place from the competition among the fund vendors; not unlike the early days of Fido and Vanguard putting a death nail into the traditional retail fund fees of E.F. Hutton, Merrill Lynch and all the others who had to change their money tune or be left in the dust from the stampede.
Another fee feature should be added to the 529 plans, not unlike the 90 or 180 day fee periods we find with our fund families today. To limit asset moves to only once per year in a 529 is so much crap. This is not a method to help protect the monies for one's child college monies. I have written to our DC folks about making such changes; but they have been stuck with all of the machinations/legislation since the market melt, that this request is surely long forgotten.
An example could be 3 reallocations of 529 monies in a calendar year; with additional moves costing 1%, or whatever. This fee charge should more than cover transaction costs incurred by the fund family.
Well, there is surely more; but I need to get back to work.
Regards,
Catch